Trading Capital

[wskid 10]

Hello, I've been trading futures for a year now for a prop shop. I was wondering how much capital would it take to trade 1 lot on the e-minis. Putting the margin is not enough, you need a cushion, how much is enough? Also, is Ninja trader the best for a low budget guy like me? What's the best setup. I'm used to trading with DOMs. Thanks for the help!

[jonbig04 10]

Hello, I've been trading futures for a year now for a prop shop. I was wondering how much capital would it take to trade 1 lot on the e-minis. Putting the margin is not enough, you need a cushion, how much is enough? Also, is Ninja trader the best for a low budget guy like me? What's the best setup. I'm used to trading with DOMs. Thanks for the help!

 

There will be people you say you only need $1,000 per contract and people who say you need $5000 per contract. IMO it depends entirely on you. You've been trading for a year now so you should know what your equity curve, max draw down, and accuracy look like.

 

Some systems take large draw downs, some don't. My personal view is that if you begin trading with, say, $1,500, that gives you a full $1,000 before you can't no longer trade (given a $500 intraday margin). For me, If I lost $1,000 trading 1 car, something would be seriously wrong and I would want to go back to sim and see what I could do to fix it. For others that kind of draw down may be acceptable. It depends entirely on what your system's risk profile looks like IMO.

[BlowFish 10]

Depends somewhat on the approach 50:50 type methods with say a 2:1 reward to risk have lumpier equity curves than (for example) a 70% method with a 1:1 RR. The key metric is the risk of ruin which is calculable if you have an idea on how your method performs. You can get to a point where it becomes negligible or (as many do) you can size more aggressively.

 

Out of interest, are you trading the same approach you did with your prop shop?

[wskid 10]

I guess from what I've seen so far, ppl throwing size around I figured I needed at least 15K to start. Right now I trade 5 contracts on fixed income derivatives with a scalping and sometimes position trading. With 5 contracts my max drawdown is $500/day but I seriously think it's too much. With one contract It should be around $100-150. In essence from what I understand to be safe it would take around 5K, but with which platform, I currently use TT costing me with desk fees $2500/month, which really kills me. I heard ninja trader was not bad. I really don't care about spreads for now so the important thing to me would be to have a DOM for the cheapest price. Also what broker offers the best rates?

 

Again, my prop shop keeps us in the dark a bit and being new to the business, I feel a bit cheated.

[zapisy 10]

Where you trade now?

 

How many cotracts you trade a month?

 

The only platform that has something like DOM is tradestation called MATRIX.

[jonbig04 10]

I guess from what I've seen so far, ppl throwing size around I figured I needed at least 15K to start. Right now I trade 5 contracts on fixed income derivatives with a scalping and sometimes position trading. With 5 contracts my max drawdown is $500/day but I seriously think it's too much. With one contract It should be around $100-150. In essence from what I understand to be safe it would take around 5K, but with which platform, I currently use TT costing me with desk fees $2500/month, which really kills me. I heard ninja trader was not bad. I really don't care about spreads for now so the important thing to me would be to have a DOM for the cheapest price. Also what broker offers the best rates?

 

Again, my prop shop keeps us in the dark a bit and being new to the business, I feel a bit cheated.

 

Damn $2,500 a month? Ninjatrader costs me $190 every 3 months, my broker charges $4.80 or so per RT.

 

Then again I don't know anything about how you trade, maybe you do something much different than me that requires something I'm not aware of.

[wskid 10]

My TT only costs $1500 per month, my broker charges 1.68 RT and add an overhead of $1000 for the prop shop. Yeah its bad....that's why I want to trade my own account, trade less and take longer positions. So your ninja trader is 63 per month? I heard you can buy the platform for 1K.

 

I trade high frequency for small amounts, like 2-5 ticks. It doesn't suit my style, though and where I am now they don't let me take overnight positions so I am forced to trade intraday.

 

What do you trade? How long has it been?

[thalestrader 14]

I trade high frequency for small amounts, like 2-5 ticks. It doesn't suit my style, though and where I am now they don't let me take overnight positions so I am forced to trade intraday.

 

Just because you trade intraday does not mean you need to trade frequently for bird seed. You could choose to apply yourself to developing an approach that allows you to catch 20-100 tick moves. It can be done.

 

Ninja is free if you use it just for charting, but you will need either a broker whose feed connects to Ninja, or you will need to lease a compatible data feed. I use Ninja for charting, but I trade from my broker's DOM or TWS.

 

Best Wishes,

 

Thales

[enochbenjamin 10]

Dude if your going solo - find a broker that offers TT free. You wont get the pro version but you get most of the features. The catch is that you will pay a bit higher commission - closer to 3.50 RT.

 

As far as funds to start - the late great George Lane (inventor of stochastic) argued that regardless of how much capitol you have never give a broker more than $5000. With 5k there are numerous brokers that will let you day trade 8-10 cars. If you know what you are doing you can make a decent living with a 5k account.

 

If you need to trade more size I would suggest using multiple brokers. I think its quite obvious I don't trust ANY broker. Keep em on short leashes and regularly withdraw profits.

 

just my 2¢

[wskid 10]

its encouraging to hear that 5K is feasible, I'm only looking to trade 1-2 lots in the eminis. I also would like to know if any of you guys know of brokers that accept Canadian clients. Any of them offer TT for free? I know AMP futures offer some interesting rates and TT but I don't know if they deal with Canadian clients.

 

Enochbenjamin, I agree with withdrawing profits regularly haha.

 

BTW thanks for the help guys I appreciate it.